Non-alcoholic beverage market in India
Posted: Aug, 05 2009
Comments Add Comment The majority of urban and suburban Indians consume non-alcoholic store bought beverages “less than once a day” suggesting a large untapped market potential. In order to increase consumption and penetration of such beverages however, manufacturers will have to address the two primary reasons why some Indians abstain entirely, that is, health concerns and undesirable taste - as highlighted in Boston Analytics’ survey of 8300 people across 15 cities.
Approximately 120 billion liters of beverages are consumed by Indians every year, but only 5% represent store-bought packaged beverages. The majority of Indian consumers (75%) still consume non-alcoholic store-bought beverages ‘less than once a day’, highlighting a large untapped market opportunity, particularly in the carbonated drinks and juice or juice-based markets (estimated to be worth $1.5 Billion and $.25 billion respectively). While consumption frequency decreases with age, it is found to increase with income levels, except in the top-most economic strata of society. Health concerns remain the primary reason for not consuming non-alcoholic store-bought beverages at all. Yet of the 40+ brands covered in Boston Analytics’ study, none held a definitive position in this regard either positively or negatively. Boston Analytics’ study also revealed that 29% of those who consume non-alcoholic store bought beverage beverages do so at a fixed time during the day, suggesting that carbonated beverages have become a part of life for a significant portion of the Indian consumer market. Product taste is the primary driver of brand choice for carbonated, juice-based and sports/energy drinks. While consumptions patterns are somewhat similar across different tiered cities, reasons for not consuming non-alcoholic store bought beverages vary considerably. This study has implications for both the marketing and product development of carbonated, juice based and sports/energy drinks. Significant opportunities exist for manufacturers to expand these markets through both greater consumption and greater penetration.
- The store-bought non-alcoholic beverage market in India is significantly underpenetrated, even in urban and suburban areas. 75% of those interviewed for this study report consuming store bought non-alcoholic beverages less than once a day. While consumption increases with income (with the exception of the highest household income level), it decreases with age.
- One possible hypothesis for low penetration is the lack of routine consumption. Only 29% of carbonated beverage consumers, 27% of fruit or juice based drink consumers and 9% of energy or sports drink consumers report consuming such beverages at a regular time each day.
- Overall, health concerns was the most common reason for abstaining from consuming store bought non-alcoholic beverages followed by a desire to prepare one’s own fresh beverages. Significant differences exist however by product category, i.e., carbonated beverages, fruit drinks and energy or sports drinks in terms of reasons for abstaining.
- There are numerous initiatives which manufacturers, distributors and marketers can take in order to increase their market share in these product categories. For example: o Non-alcoholic beverage brands do not appear to be positioning themselves or differentiating themselves along the brand attributes that matter most to consumers in terms of product/brand selection and reasons for consuming and/or not consuming
o As with most product categories in India, consumption behavior and preferences differ dramatically across cities in India. While Tier 1 cities (or the largest metros in India) report the highest consumption, significant differences exist among these cities, e.g., in terms of the time of day store-bought non-alcoholic beverages are consumed, preferred brands for carbonated beverages, reasons for consuming a particular product type, etc.). Such differences demonstrate the need for carefully targeted marketing campaigns that appeal to the needs, behaviors and preferences of local communities.
For more information go to http://www.bostonanalytics.com/news.html
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